Auto executives say factories undergoing radical changes

TRAVERSE CITY, Mich. — Even with high gasoline prices, U.S. consumers still want high-quality vehicles that haul a lot of people and perform well, and that is forcing automakers to make radical changes in vehicle manufacture, panelists said Monday at an industry conference.

Speaking at the Center For Automotive Research Management Briefing Seminars, executives for Toyota Motor Corp., Ford Motor Co. and Chrysler LLC said they are rapidly changing operations to keep up with the market while still trying to improve quality.

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Customers now have such high expectations that automakers are under simultaneous pressures to cut costs, improve productivity, raise quality and speed new models to the market more quickly, panelists said.

”The market is telling us to change and to change right now,“ said Bennie Fowler, Ford's group vice president for global quality.

All three executives said their companies are responding by fitting their plants to build multiple models, listening to employees who make quality improvement suggestions, and trying to save money by using less energy. All have cut factory production of pickups and sport-utility vehicles while trying to increase small-car output.

Toyota hasn't been immune to the changing U.S. market, in which sales have dropped 10.5 percent during the first seven months of the year. Sales of light trucks are off nearly 19 percent; car sales are down about 1 percent.

Toyota has announced plans to suspend pickup and large SUV production until November at two U.S. plants and to convert its new factory in Blue Springs, Miss., to make the Prius gas-electric hybrid in 2010 instead of the Highlander crossover SUV. Highlander production will be moved to Princeton, Ind., while Tundra pickup production will be consolidated to one plant in San Antonio, Texas, said Steve St. Angelo, senior vice president of Toyota Motor Engineering and Manufacturing in North America, based in Erlanger.

”We believe our flexibility is good, however, we are working hard ... to improve it,“ St. Angelo said.

The changes will allow Toyota to better use its factory capacity and adjust to the changing market, he said.